STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CONGEN PROPERTIES, INC., )

)

Complainant, )

)

vs. ) CASE NO. 84-2869A

)

BLUE PRIZE PACKERS, INC., )

)

and )

) McDONALD INSURANCE AGENCY, INC., )

)

Surety. )

)

RECOMMENDED ORDER

This case arises from a complaint filed pursuant to Section 601.66, Florida Statutes, by Congen Properties, Inc., against Blue Prize Packers, Inc. The matter was referred to the Division of Administrative Hearings and a hearing was duly scheduled for March 5, 1985, at Winter Haven, Florida. Immediately prior to the commencement of the hearing counsel for the parties filed with the Hearing Officer a document titled STIPULATION AND CONTENTIONS which contains the parties' stipulations to various facts, as well as their contentions on the legal issues. At the same time counsel for the parties also filed with the Hearing Officer the deposition of Mr. Alfred Poucher and a document titled RECOMMENDED ORDER which constitutes their joint proposed findings of fact, conclusions of law, and recommendation. The substance of the last-mentioned document has been incorporated into this Recommended Order.

FINDINGS OF FACT

Based on the factual stipulations and the deposition testimony of Mr.

Alfred Poucher, I hereby make the following findings of fact:

1. During the 1982-1983 citrus fruit season Congen delivered various varieties of citrus fruit to Blue Prize. Congen is a grower as well as a processor, and the fruit which was delivered to Blue Prize was owned by Congen. During the 1982-1983 citrus season Blue Prize operated a fresh fruit packing house.

   
   

2. The citrus fruit referred to in the preceding paragraph was delivered pursuant to an oral contract negotiated between Jack Neitzke on behalf of Congen and Alfred Poucher on behalf of Blue Prize. Neitzke served as general manager of Congen. Poucher served as president of Blue Prize.

   
   

3. The contract provided that Congen would deliver citrus fruit to Blue Prize on an account sales basis and that Blue Prize would pay for the fruit in the following manner:

   1. For Novas delivered to Blue Prize by Congen and Packed by Blue Prize, Blue Prize agreed to pay an amount at least equal to the net return to Congen from its sale of Novas to A. S. Herlong during the same citrus season. Congen's sales to Herlong netted Congen $8.026 per packed box.

      
      

   2. For White Grapefruit delivered to Blue Prize by Congen, Blue Prize agreed to pay Congen the average net per box return Congen received during the same citrus season for White Grapefruit Congen sold for processing, inclusive of any applicable picking, roadside, and hauling charges incurred by Congen, for all field boxes delivered. The average return per box was $1.5475.

      
      

   3. For Temples, Hamlins, and Valencias delivered to Blue Prize by Congen, Blue Prize agreed to pay Congen for all field boxes delivered an amount at least equal to the average amount returned per box on the Citrus Belle processing plant seasonal pool. The Citrus Belle pool returned $.96 per pound of solids for early and mid-season fruit which includes Temples and Hamlins.

      The average pounds of solids per box for Temples was 6.1052, and the average pounds of solids per box for Hamlins was 5.4. The pool returned $1.10 per pound of solids for Valencias, and the average pounds of solids per box for Valencias was 6.0137.

      
      

   4. Congen agreed to give Blue Prize credit for all eliminations (fruit which could not be packed by Blue Prize as fresh fruit) which were either returned to Congen or which were sent to a processing plant and for which the proceeds from the processing plant were ultimately paid to Congen. The elimination credit was to be calculated according to the same formulae used by Congen to charge Blue Prize for the fruit. The Valencia eliminations totaled 4,038.63 pounds of solids. The Temple and Hamlin eliminations totaled 1,119.52 pounds of solids. The total elimination credit due Blue Prize was $5,517.23.

      
      

4. During the 1982-1983 citrus season Congen delivered 5,920 field boxes of Novas, 920 field boxes of Temples, 1,380 field boxes of white Grapefruit, 120 field boxes of Hamlins, and 1,748 field boxes of Valencias to Blue Prize. 5,589 boxes of Novas, 682 boxes of Temples, 101 boxes of Hanlins, and 1,330 boxes of Valencias were packed. According to these figures and the agreed upon prices to be paid, Blue Prize owed Congen $44,857.31 for Novas which were packed,

   $5,462.769 for Temples which were delivered, $2,135.55 for white Grapefruit which were delivered, $622.080 for Hamlins which were delivered, and $11,597.753 for Valencias which were delivered. These amounts total $64,675.45.

   
   

5. Blue Prize paid Congen $30,000 for the fruit delivered by Congen during the 1982-1983 citrus fruit season, and after giving Blue Prize credit for this amount and also giving Blue Prize credit for the eliminations and harvesting and trucking charges, the amount Blue Prize owes Congen is $25,278,86.

   
   

   CONCLUSIONS OF LAW

   
   

   Based on the foregoing findings of fact and on the applicable legal principles, I make the following conclusions of law:

   
   

6. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this case.

   
   

7. Because the matter in controversy is based on a contract, the terms of which are not disputed by the persons who entered into the contract on behalf of the respective parties, there are only two legal issues which must be decided.

8. Blue Prize contends that the fruit delivered to it by Congen was delivered strictly on an account sales basis and that Blue Prize was not under any obligation to pay Congen a minimum amount for any fruit. Blue Prize asserts that it was required only to deliver to Congen the proceeds of the sale of fruit packed and shipped as fresh fruit plus the proceeds to Blue Prize from the sale of any eliminations less packing and elimination charges. Blue Prize asserts, therefore, that Poucher did not have the authority to enter a contract with Congen. As stated earlier, Poucher was president of Blue Prize. Blue Prize recognized that some contractual arrangement existed between Congen and Blue Prize and, based on this fact and the testimony, that any such contract was negotiated between Neitzke and Poucher, it is concluded that Poucher, as president of Blue Prize, had at least the apparent authority to negotiate all terms of the contract. Poucher held himself out to Congen to be a person authorized to negotiate contracts on behalf of Blue Prize, and Congen was not on notice that Poucher may not have had this authority.

   
   

9. When Poucher negotiated the contract between Blue Prize and Congen he also served as a commissioned fruit buyer and seller for Congen. Wilbur Barnes, an officer and shareholder of Blue Prize, contends that Poucher had an irreconcilable conflict of interest when the contract was negotiated and that Poucher breached his fiduciary duty to Blue Prize by agreeing to a contract which was not in the best interests of Blue Prize. Poucher testified that Blue Prize received from its sale of the fruit an amount less than the amount Poucher obligated Blue Prize to pay Congen. The conflict of interest issue raised by Barnes may give Blue Prize and Barnes rights against Poucher but the conflict does not affect Congen's rights against Blue Prize. The contract was recognized by Blue Prize, and by its continued acceptance of fruit from Congen and the payment of $30,000 Blue Prize cannot now acknowledge the existence of some contractual arrangement but disavow the price terms of the arrangement.

RECOMMENDATION

Based on all of the foregoing, it is recommended that the Department of Agriculture and Consumer Services enter a Final Order concluding the Blue Prize Packers, Inc., is indebted to Congen Properties, Inc., in the total amount of

$25,278.86, and ordering that the full amount of the debt be paid within 30 days from the date of the Final Order.

DONE and ORDERED this 15th day of March, 1985, at Tallahassee, Florida.

MICHAEL M. PARRISH

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 15th day of March, 1985.

COPIES FURNISHED:

H. Richard Bates, Esquire Anderson & Rush

322 East Central Blvd.

P.O. Box 2288

Orlando, Florida 32802

M. David Alexander, III, Esquire Post Office Box 2376

Bartow, Florida 33830

Robert A. Chastain, Esquire General Counsel

Department of Agriculture and Consumer Services

Mayo Building

Tallahassee, Florida 32301

McDonald Insurance Agency, Inc. Post Office Box 940

Winter Haven, Florida 33880

Blue Prize Packers, Inc. 1200 Highway 27, North Winter Haven, Florida 33880

Congen Properties, Inc. Post Office Box 847 Labelle, Florida 33935

Honorable Doyle A. Conner Commissioner of Agriculture The Capitol

Tallahassee, Florida 32301

Docket for Case No: 84-002869

Orders for Case No: 84-002869